Canada July Factory Sales Rise 1.7% on Energy and Lumber

Sept. 17 (Bloomberg) -- Canadian factory sales rose at the
fastest pace in five months in July on gains for makers of
commodities from crude oil to lumber to fabricated metals.

Sales climbed 1.7 percent to C$49.5 billion ($48 billion),
Statistics Canada reported today from Ottawa, with the total
boosted by upward revisions to the prior two months. The gain
exceeded all 18 economist forecasts in a Bloomberg survey with a
median of 0.5 percent.

The report adds to signs the economy is picking up after a
slump in exports and investment late last year and disruptions
in the second quarter from flooding in Alberta and a Quebec
construction strike. The factory gain may contribute to the
world’s 11th largest economy rebounding to growth of 0.7 percent
in July after June’s 0.5 percent drop according to Royal Bank of
Canada economist Nathan Janzen.

“The strength in July was encouraging,” Janzen said in a
telephone interview from Toronto. “The weakness in June didn’t
make sense.” Statistics Canada revised the prior month’s
factory sales decline to 0.1 percent from 0.5 percent.

The gains came after flooding in June in Alberta, home to
the country’s oil sands deposits. Sales in that province rose
2.1 percent in July.

Unfilled orders rose 0.4 percent to C$73.6 billion in July,
while new orders dropped 1.7 percent to C$49.8 billion.
Inventories rose 0.4 percent to C$69.1 billion, with the ratio
of factory stockpiles to sales falling to 1.40 from 1.41.

Even with the gains, factory sales fell 0.1 percent from a
year earlier and remain below the peak of C$50.5 billion at the
end of 2011. That leaves manufacturing as the biggest sector of
Canada’s economy that hasn’t returned to levels recorded before
the last recession in 2008.

“Today’s report perhaps provides early signs that the
winds might be changing for the struggling industry,” Francis
Fong, economist at Toronto-Dominion Bank, wrote in note to
clients.